IN THE SUPREME COURT OF BRITISH COLUMBIA

Citation:

Barbour v. The University of British Columbia,

 

2009 BCSC 425

Date: 20090330
Docket: L050032
Registry: Vancouver

Between:

Daniel S. Barbour

PLAINTIFF

And

The University of British Columbia

DEFENDANT


Before: The Honourable Mr. Justice Goepel

Reasons for Judgment

Counsel for the Plaintiff:

S.D. Matthews
R.M. Mogerman

 

Counsel for the Defendant:

D.G. Cowper, Q.C.
R.J. Berrow
D. Ullrich
M. Tsurumi

 

Date and Place of Trial:

September 22-26, 2008

 

Vancouver, B.C.

INTRODUCTION

[1]                Since 1990, the University of British Columbia (“UBC”) has collected over $4,000,000 in fines and related towing fees, storing charges, administrative fees and other expenses and monies (the “Parking Regulation Fines”) for breaches of the UBC Parking Regulations (the “Parking Regulations”).  The plaintiff in this class action seeks on behalf of the class reimbursement of the monies paid.

[2]                UBC is a university incorporated pursuant to the University Act, R.S.B.C. 1996, c. 468 (the “U.A.”).  Section 27(1) of the U.A. vests the management, administration and control of the property, revenue, business and affairs of the university in its Board of Governors (the “Board”).  Pursuant to s. 27(2)(t) of the U.A., the Board is given the power “to control vehicle and pedestrian traffic on the university campus”.

[3]                The Board enacted the Parking Regulations and made them effective as of September 1, 1990.  The Parking Regulations contain provisions governing vehicle traffic on campus, including the parking of cars.  The Parking Regulations include provisions regarding offences, penalties, enforcements and appeals.

[4]                The plaintiff brings this action on his own behalf and on behalf of all persons from whom UBC collected the Parking Regulation Fines from September 1, 1990 to the present (the “class”).  The plaintiff alleges that the enforcement provisions of the Parking Regulations are unlawful because they are ultra vires UBC’s delegated legislative authority.  The plaintiff seeks restitution of and the constructive trust over the collected Parking Regulation Fines.

[5]                In its statement of defence, UBC first pleads that the Parking Regulations are intra vires the powers vested in the Board pursuant to the U.A.  Alternatively, it pleads that if the Parking Regulations are ultra vires, there exist various private law justifications for the enforcement of the Parking Regulations and UBC’s collection and retention of the Parking Regulation Fines. 

[6]                In Barbour v. U.B.C., 2006 BCSC 1897 (“Barbour 2006”), I certified the action as a class proceeding.  In Barbour v. U.B.C, 2007 BCSC 800 (“Barbour 2007”), the common issues were framed as follows:

1.     Are the University of British Columbia Parking Regulations (the “Parking Regulations”) in whole or in part, ultra vires the public law powers delegated to the Board of Governors (the “Board”) of the University of British Columbia (“UBC”) by the University Act, R.S.B.C. 1996, c. 468?

2.     Apart from UBC’s public law powers pursuant to the University Act, can UBC:

(a)      enter into valid and enforceable contractual licenses which incorporate the substance of the Parking Regulations; or

(b)      rely on its common law proprietary rights as the owner of the UBC campus to collect and retain the equivalent of all fines and related towing fees, storing charges, administrative fees and/or other expenses and monies collected under the Parking Regulations  from September 1, 1990 to the present (the “Parking Regulation Fines”)?

3.     If the Parking Regulations are found to be ultra vires, in whole or in part, the public law powers of the Board, can UBC:

(a)      enter into valid and enforceable contractual licenses which incorporate the substance of the Parking Regulations; or

(b)      rely on its common law proprietary rights as the owner of the UBC campus to collect and retain the equivalent of the Parking Regulation Fines?

4.     If the answer to question (1) is yes, are the plaintiff and other class members entitled to public law restitution in the amount of the Parking Regulation Fines, subject only to applicable defences, if any, under the Limitation Act, R.S.B.C. 1996, c. 266, regardless of any juristic reason for the collection of the Parking Regulation Fines, including contracts and licenses entered into between UBC and class members, and UBC’s common-law propriety rights as the owner of the UBC campus?

5.     What limitation periods, if any, apply to the plaintiff and class members’ claims for restitution?

6.     Are the plaintiff and the class members entitled to prejudgment interest pursuant to the Court Order Interest Act, R.S.B.C. 1996, c. 79?

[7]                Common questions 1, 4 and 5 arise from the plaintiff’s claim while questions 2 and 3 arise out of the defences raised by UBC.

[8]                In its statement of defence and throughout the certification process, UBC took the position that the Parking Regulation Fines were intra vires the powers vested in the Board pursuant to the U.A.  At the commencement of the common issue trial, UBC abandoned that position and acknowledged those parts of the Parking Regulations that impose the Parking Regulation Fines are ultra vires the public law powers conferred on the Board under the U.A.  UBC now relies on its alternate submission that there exist private law justifications for the enforcement of the Parking Regulations and UBC’s collection and retention of the Parking Regulation Fines.  In addition, UBC claims a right of set-off for unpaid parking services.

[9]                It is important to note that the plaintiff does not challenge UBC’s right to regulate parking on campus or to charge for parking.  The challenge is limited to UBC’s right to collect the Parking Regulation Fines.

BACKGROUND

[10]            The evidence at the common issue trial was limited to the plaintiff’ Notice to Admit and portions of an affidavit of Danny Ho, sworn March 12, 2006.  Mr. Ho who is UBC’s Director of Parking Services also gave viva voce evidence and was cross-examined.  His affidavit had originally been filed at the certification hearing.

[11]            There is little disagreement concerning the facts.  I adopt the factual background set out in Barbour 2006 at paras. 6-23:

[6]        Every day tens of thousands of people travel to and from UBC.  These include students, faculty and staff, employees of other organizations, residents of UBC’s neighbourhoods and visitors frequenting the university’s services, educational, cultural, leisure or nature offerings and attractions such as the UBC Hospital, museums, theatres, sports facilities and gardens.

[7]        The Parking Regulations establish general traffic rules on the UBC campus.  They apply to the entire campus and by their terms are enforced throughout the year.

[8]        Section 2 of the Parking Regulations sets out that all parking on campus requires a permit or payment at a pay lot, parkade or meter.  It provides particulars in relation to the various permits that are available.

[9]        Section 3 of the Parking Regulations requires that all motor vehicles parked in permit lots on campus by faculty and staff, graduate and undergraduate students and persons whose normal place of employment is on campus must be registered.  It notes that unregistered vehicles are only permitted to park in pay lots or parkades or at meters. 

[10]      Section 8 sets out that vehicle access to walking areas of campus is not permitted without authorization. 

[11]     Section 9 notes that the enforcement provisions of the Motor Vehicle Act and the Highway Act apply to roadways on the university campus. 

[12]      Section 10 prohibits parking in certain areas, including building entrances, sidewalks, fire zones or areas that in any way impede the movement of emergency vehicles or traffic.

[13]      Section 12 provides for the issue of traffic notices for any contravention of the Parking Regulations. 

[14]      Section 13 sets out that any person who commits an act forbidden by the Parking Regulations is guilty of an infraction and liable to penalty.  The penalties are listed in a parking penalty schedule.  A vehicle may be impounded if the penalties for three or more violations of the Parking Regulations remain unpaid.

[15]      Section 14 allows for the impoundment of vehicles.  Grounds for impoundment include the impeding or obstructing of traffic, the blocking the movement of other parked vehicles, occupying a reserve space without authority, parking in contravention of a parking sign or in a prohibited area, displaying a counterfeit, lost or stolen permit, or circumstances of a repeat offender as defined in s. 13(2).  The section specifies that If a vehicle is impounded, it will be held pending payment of all outstanding fees including towing fees, storing charges plus administration fees.

[16]      Section 16 of the Parking Regulations sets up an appeal process.  Appeal notices must be filed within fourteen days and be accompanied by the prescribed penalty payment which payment will be refunded if the appeal is allowed.  While the Parking Regulations state that appeals received without the required penalty may not be processed, evidence at the hearing suggests that as a matter of practice appeal notices given after the 14 day period and made without payment are considered.

[17]      In order to manage access to the university facilities and to control moving and resting traffic on campus, UBC has created the Parking and Access Control Services Department (“PACS”).  PACS administers the Parking Regulations and is responsible for providing and managing vehicular access to campus facilities, balancing the supply and demand of parking on campus, ensuring parking facilities services and equipment are functional, accessible and easy to use and ensuring the long term financial viability and sustainability of the parking and access system, including the development and maintenance of facilities and physical assets.

[18]      One of UBC’s main components of traffic control on campus is to provide parking facilities including surface lots, parkades or metered parking for approximately 10,000 vehicles in strategic locations near the perimeter of the campus and to restrict parking to those facilities.  The available parking options serve as access points for nearby facilities and direct traffic away from other areas of the campus.  Parking as a means of traffic and access regulation on the UBC campus is particularly important because of the large non-resident student population, the size and location of the campus, and a dearth of parking alternatives in the surrounding area. 

[19]      PACS has developed an array of traffic and parking related features based on demand, required turnover, traffic patterns and space alternatives.  These include:  restriction of parking facilities for certain users; user fees; permits; rules to control parking within parking facilities, including maximum allowable parking periods, hours of operation, and differences in parking rates; rules to limit outside designated parking areas; and enforcement measures such as traffic notices, fines and, if warranted, towing.

[20]      Currently, UBC maintains three types of parking facilities:

(1)        five parkades with approximately 4,900 parking spaces;

(2)        more than forty surface lots with approximately 3,000 parking spaces; and

(3)        approximately 300 metered parking spaces.

Each of the parking facilities operates with its own set of rules and procedures which have changed and evolved since the Parking Regulations were passed.  For example, surface lots may be open only to permit holders, hourly parking or a combination of both.  Hourly parking is offered through automated ticket dispensers placed in central locations, which allow users to purchase pre-paid parking time.  In close proximity to the automatic ticket dispensers, PACS has posted signs displaying the applicable fee schedules.  The signs note that vehicles that do not display a valid ticket or permit, or that have outstanding parking violations, may be impounded.

[21]      Apart from hourly parking for transit users, UBC has created long-term parking permits for various groups of regular users of UBC parking facilities.  The permits are subject to geographic restriction and are also time limited in various lengths.  On the UBC parking permit applications currently at use, as well as some but not all of the historic application forms, applicants agree to comply with the Parking Regulations.

[22]      Students, faculty and staff living in residence enter into separate residence contracts with UBC at the beginning of their tenancies.  These contracts have varied over time and also differ depending on the type of residence.  Each of the standard form contracts currently in use include a provision referencing the Parking Regulations.

[23]      From 1990 to 2004 every UBC student received a printed copy of the UBC calendar before commencing or returning to their studies at the beginning of the new academic year.  Since 2005, the official calendar has been posted on the UBC website for on-line viewing or downloading.  The calendar contains information concerning UBC’s rules and regulations.  It also contains the following student declaration:

I hereby accept and submit myself to the statutes, rules and regulations and ordinances of the University of British Columbia and of the faculties in which I am registered and to any amendments thereto which may be made while I am a student of the university, and I promise to observe the same.

[12]            Some statistical evidence was introduced.  From the total of 432,847 traffic tickets issued from January 1, 1990 to December 31, 2005, more than half (219,664) remain unpaid.

[13]            For the time period September 1, 2000 to March 5, 2006, PACS issued violation notices to 115,456 license plate numbers.  That total may be broken down according to the number of outstanding violation notices associated with the license plate as follows:

(a)        76,025 license plate numbers (or 65.8%) have only one violation notice on record, accounting for 33.6% of the total;

(b)        18,929 license plate numbers (or 16.4%) have two violation notices, accounting for 16.7% of the total;

(c)        8,075 license plate numbers (or 7%) have three violation notices, accounting for 10.7% of the total;

(d)        12,427 license plate numbers (or 10.8%) have four or more violation notices, accounting for 39% of the total.

[14]            As set out in the above figures, less than 20% of violation notice recipients are responsible for almost half of all parking infractions.  That is, 49.7% of the violation notices are attributable to only 17.8% of the violators, each of whom has committed three or more violations.

[15]            From January 1, 1996 to December 31, 2005, PACS converted or waved approximately 13.4% of all issued violation notices. “Converted” means that the penalty was withdrawn but the violation remained on record.  “Waived” means the violation itself was withdrawn.

[16]            Towing of vehicles may occur in several situations including for:

(a)        impeding or obstructing traffic;

(b)        blocking the movement of other vehicles;

(c)        occupying parking spaces reserved for other vehicles;

(d)        parking in contravention of a parking sign, on crosswalks, sidewalks, or areas identified with yellow hash marks as no parking zones;

(e)        being parked in a pay lot or a parkade for more than 24 hours without payment of the requisite parking fees;

(f)        being abandoned; and

(g)        repeat offender status.

[17]            According to the Parking Regulations, a vehicle qualifies as a repeat offender when PACS records show at least three unpaid parking infractions registered under the vehicle’s license plate.  As a matter of practice, PACS does not tow vehicles under the repeat offender provision until they have at least four outstanding parking infractions.

[18]            Until approximately 1996, it was PACS’ practice not to add vehicles to its tow list until they had 10 unpaid traffic notices and to issue tow warnings prior to towing a vehicle with 10 or more violation notices.  Under this practice, at least 1,000 tow warnings remained outstanding at any given time.  Over time, and with a goal to improve access to the community, PACS reduced the number of unpaid violations prior to towing to the present level of four.

[19]            With regard to situations where vehicles impede or instruct traffic, or block the movement of other vehicles, a patrol person has some discretion whether the circumstances require towing. 

[20]            Tow rates are very low, approximately one or two vehicles a day.  Towing is generally limited to four categories: vehicles obstructing emergency access, those occupying a disabled spot without a permit, upon complaint and “repeat offenders”.

[21]            Vehicles are towed to an impound lot operated by PACS on campus.  The towed vehicle is released to its owner once all outstanding penalties and towing charges are paid. 

[22]            Mr. Ho testified that PACS relies on the Parking Regulation Fines for enforcement purposes.  Penalties are meant to deter activities which restrict the flow of traffic and compel compliance with the Parking Regulations.  He testified that when a strike suspended all enforcement of the Parking Regulations, chaos ensued as drivers ignored the Parking Regulations, clogged the campus with vehicles and parked where they wanted for as long as they wanted.

[23]            A June 3, 2002 report to the Board notes that students are the recipients of approximately 70% of all parking citations.  The report recommended amending University Policy 67 to increase parking enforcement revenue.  In July 2002, the Board accepted that recommendation.  Under the amended Policy 67, UBC may refuse to process an application for admission, allow subsequent registration or provide academic transcripts to a student with unpaid Parking Regulation Fines.

[24]            UBC has never relied on either contracts or its common law proprietary rights to collect Parking Regulation Fines.  Throughout the class period UBC, in fact, only collected the Parking Regulation Fines pursuant to the Parking Regulations with what it asserted was its statutory authority to do so pursuant to the U.A.  

COMMON QUESTIONS

A.        Are the Parking Regulations Ultra Vires?

[25]            UBC has now conceded that parts of the Parking Regulations that impose the Parking Regulation Fines that the Class seeks to recover are ultra vires  the public law powers conferred on the Board under the U.A

[26]             UBC acknowledges that it has never possessed legislative authority to create offences or penalties in relation to parking and that the U.A. does not authorize the creation of regulations which allow for the imposition of the Parking Regulation Fines.  UBC submits that the first question be answered yes.

[27]            In regard to Question 1 the plaintiff seeks much wider relief.  In particular, it seeks a declaration that certain specific sections of the Parking Regulations are ultra vires the public law power delegated to the Board and that the Parking Regulations are ultra vires because they violate rules of natural justice.

[28]            Considerable evidence was led from Mr. Ho relevant to the natural justice issue.  The plaintiff submits that the Parking Regulation Fines create an institutional breach of natural justice.  Specific complaints are that the Parking Regulations purport to impose fines and penalties on the basis of a presumption of guilt that does not provide the right to be heard.  The plaintiff further submits that the right to appeal contained in the Parking Regulations is flawed as the appeal is not to a neutral body but to the same body that issued the penalty.  In the plaintiff’s submission, UBC, through PACS, plays the role of police, prosecutor and judge in the scheme.  The plaintiff submits that the structural natural justice problem is not cured by the way the Parking Regulations are, in fact, enforced or because UBC has adopted a policy of waiving the necessity of paying the penalty to launch an appeal. 

[29]            The plaintiff’s allegation that the enforcement provisions are ultra vires for a given set of reasons must be considered in the context of the plaintiff’s claim for restitution of the amounts paid.  Restitution is the substantive relief claimed.  UBC concedes that the enforcement provisions, pursuant to which the plaintiff claims restitution, are not effective as a matter of public law.  That concession is all that is required to move on to the remaining common issues. 

[30]            I agree with UBC that the declarations the plaintiff seeks are neither necessary nor required.  What is essential to address the remaining common issues is an affirmative answer to question 1. 

[31]            UBC’s concession that the Parking Regulation Fines are ultra vires makes the natural justice issue moot.  The answer to that question will not assist in determining the balance of the common issues and I decline to do so.

B.        UBC’s Private Law Powers

1.         Overview

[32]            Common questions 2 and 3 engage UBC’s alternative defence that there exist various private law justifications for the enforcement of the Parking Regulations and UBC’s collection and retention of the Parking Regulation Fines. UBC pleads that from time to time it has entered into contracts with, or granted licences to, the class members for the use of UBC parking facilities (the “Contracts” and “Licences”).  UBC submits that the Contracts and Licences incorporate expressly, or by implication, the text of the Parking Regulations, including UBC’s authority to charge and collect the Parking Regulation Fines, tow vehicles and provide an appeal process in the manner set forth in the Parking Regulations.

[33]            UBC also relies on its common law proprietary rights as the owner of the UBC campus, and in particular its rights under the doctrines of trespass and nuisance, to remove vehicles parked on UBC property without consent, or in such manner as to constitute a nuisance, and to recover damages in respect of trespass and nuisance.

[34]            UBC says that in the case of any class member who paid Parking Regulation Fines as the owner or user of the vehicle parked on UBC property without the consent of UBC, either because no consent was obtained or because consent was obtained for a limited period of time which had expired, or in such a manner as to constitute a nuisance, UBC is entitled to recover damages for such trespass or nuisance, including, without limitation, damages for the time, trouble and expense of removing the vehicle where affected.  UBC further submits that it is entitled to retain the Parking Regulation Fines collected from those class members on account of such damages or as a settlement of UBC’s entitlement to them, or both, as a set-off to any such claim raised by such class members.

2.         Contractual powers

[35]            UBC was originally brought into existence by a special act:  An Act to Establish and Incorporate a University for the Province of British Columbia, S.B.C. 1908, c. 53.  During the class period, UBC was continued as a corporation in 1979 and 1996:  University Act, R.S.B.C. 1979, c. 419, ss. 3(1)(a) and (3); U.A., ss. 3(1)(a) and (3).  As a corporation, UBC has the general power to “contract and be contracted with in its corporate name:  Interpretation Act, R.S.B.C. 1996, c. 238, ss. 17(1)(b) and 29.

[36]            Effective April 1, 2005, pursuant to the University Amendment Act, 2004, S.B.C. 2004, c. 74, s. 11, universities were given the power and capacity of a natural person exercising their powers and carrying out their duties and functions under the U.A. (now s. 46.1 of the U.A.). 

[37]            Given UBC’s concession that it does not possess legislative authority to create offences or penalties in relation to parking and that the U.A. does not authorize the creation of regulations which allow for imposition of the Parking Regulation Fines, common questions 2(a) and 3(a) are effectively merged into one question, that being whether or not UBC can enter into valid and enforceable contractual regulations which are ultra vires its public law powers. 

[38]            The answer to this question requires a consideration of the law of ultra vires as it applies to corporations.  Historically, the presumption of common law was that corporations created by or under a statute have only those powers which are expressly or impliedly granted to them.  To the extent that a corporation acted beyond its powers, its actions were ultra vires and invalid: Communities Economic Development Fund v. Canadian Pickles Corp., [1991] 3 S.C.R. 388, 85 D.L.R. (4th) 88 (“Canadian Pickles”).

[39]             The doctrine of ultra vires was first applied to memorandum companies incorporated under business corporation statutes in Ashbury Railway Carriage & Iron Co. v. Riche (1875), L.R. 7 H.L. 653.  The House of Lords affirmed the applicability of Ashbury Railway to corporations created by special act in Baroness Wenlock v. River Dee Co. (1885), 10 App. Cas. 354 (H.L.).  Lord Watson held that the powers of a statutory corporation are limited by the purposes of the corporation as set out in the special act at 362-63:

Whenever a corporation is created by Act of Parliament, with reference to the purposes of the Act, and solely with a view to carrying these purposes into execution, I am of the opinion not only that the objects which the corporation may legitimately pursue must be ascertained from the Act itself, but that the powers which the corporation may lawfully use in furtherance of these objects must either be expressly conferred or derived by reasonable implication from its provisions.

[40]            Section 30 of the Business Corporations Act S.B.C. 2002, c. 57 (“B.C.A.”), abolishes the doctrine of ultra vires for British Columbia corporations incorporated under that legislation.  The B.C.A. does not apply to UBC (U.A., s. 3(4)).

[41]            The doctrine of ultra vires continues to apply to corporations created by special act for public purposes:  Canadian Pickles at para. 32.

[42]            UBC’s entire existence is derived from statute.  Whether UBC has the capacity to enter into contracts containing the impugned terms must be determined through interpretation of the statute delegating its powers.  Therefore, its authority to contract for the right to fine and impound vehicles for parking violations must be found in the U.A.

[43]            UBC relies on an obiter statement in Hague v. University of British Columbia (1988), 21 B.C.L.R. (2d) 245, 47 D.L.R. (4th) 150 (S.C.) for the proposition that UBC can contract with others who agree to be bound by regulations that UBC may not have had the statutory authority to pass.  The regulations in Hague related to Senate appeals on academic standing.  The Senate had by regulation limited substantive academic appeals to two courses only.

[44]            The court in Hague quoted from Re Polten and Univ. of Toronto Governing Council (1975), 59 D.L.R. (3d) 197 at 202, 8 O.R. (2d) 749, (Div. Ct.) for the proposition that the defendant university could have bound its students to follow rules with “no statutory basis.”  The Ontario Divisional Court in Re Polten cited University of Ceylon v. Fernando, [1960] 1 All E.R. 631 (P.C.) at 639 as authority for that proposition.  However, the rules in question in University of Ceylon were the statutes of the university, and the vires of the statutes was not an issue.

[45]            Hague is distinguishable.  The court in Hague was not asked to determine whether UBC, as a creature of statute, had the power to limit academic appeals to two courses.  There was no discussion in the decision indicating that the regulations in question were ultra vires.

[46]            UBC also relies on s. 46(1) of the U.A. which came into force on April 1, 2005. That section reads:

Subject to this Act and for the purposes of exercising its powers in carrying out its duties and functions under this Act, a university has the power and capacity of a natural person of full capacity. 

[47]            It is important to note the distinction between s. 46.1 of the U.A. and s. 30 of the B.C.A.  Pursuant to the latter, a corporation has the capacity and rights, powers and privileges of an individual of full capacity.  Section 46.1 of the U.A gives a university such powers but only for the limited purpose of exercising its powers in carrying out its duties and functions under the U.A.

[48]             In this case, UBC has conceded that the taking of fines and impounding vehicles is outside UBC’s U.A. powers.  By extension, UBC does not have the power to contract for the right to take fines or impound vehicles since that would not be in furtherance of a power under the U.A.  Since UBC has conceded that the taking of fines and the impounding of vehicles was as a matter of public law ultra vires the university, contracting for the power to take such fines is also ultra vires.  Accordingly, I find that UBC cannot enter into contracts which incorporate the substance of the Parking Regulations and the answer to question 3(a) is no.  In the result it is not necessary to answer question 2(a).

Common Law Propriety Rights

[49]            Questions 2(b) and 3(b) raise the question as to whether UBC can rely on its common law proprietary rights as the owner of the UBC campus to collect and retain the equivalent of the Parking Regulation Fines.  I am in general agreement with UBC’s submission that if a person parks their vehicle at UBC without the permission of UBC, then that person is a trespasser.  As against trespassers, UBC has its proprietary rights as a landowner, including rights based on the tort of distress damage feasant to tow cars and hold them until payment of towing and storage costs.

[50]            To sustain a claim of distress damage feasant, a party must prove actual damage:  Forhan & Read Estates v. Hallett and Vancouver Auto Towing Service (1959), 19 D.L.R. (2d) 756 (B.C. Co. Ct.).  Under the doctrine of distress damage feasant, the vehicle is only distrainable for damage it is then doing, and continuing.  A party cannot distrain for prior damage:  Vaspor v. Edwards (1702), 12 M.O.D. 658 at 660, 88 E.R. 1585 (K.B.).

[51]            In Forhan the plaintiff’s car had been removed and impounded from the defendants’ private parking lot.  The plaintiff sued for damages.  The defendants submitted that the plaintiff was a trespasser and they were entitled to distress damage feasant.  On the facts before it, the court concluded that the defendants had not proven any actual damage as the car did not block ingress or egress to or from the parking lot, did not deprive any regular patron or any patron from using the parking lot, and no proof was offered that anyone was deprived of a parking fee.  Based on that finding, the court concluded that the distress and subsequent impoundment were both unlawful and awarded damages to the plaintiff.

[52]            The plaintiff in the case at bar acknowledges that pursuant to the Board’s power “to control vehicles and pedestrian traffic on the university campus” UBC can restrict and charge for parking on campus.  The plaintiff does not challenge the vires of those sections of the Parking Regulations that regulate where parking is allowed or establish fees for parking  

[53]            UBC, as a private landowner has the power under the doctrine of distress damage feasant to impound and hold vehicles which, at the time of seizure, are causing actual damage.  I accept UBC’s submission that vehicles parked in contravention of the Parking Regulations cause damage to UBC sufficient to engage its right to invoke distress damage feasant.  Such vehicles may be impeding or obstructing traffic or the movement of emergency vehicles; blocking the movement of other parked vehicles; occupying a reserved or handicap space without authority; or parked in contravention of a parking sign, yellow curb, crosswalk, sidewalk, improved boulevard or in a prohibited area.  Where drivers have failed to pay the required parking fee UBC has been deprived of revenue and UBC has the right to remove cars parked in a pay lot or parkade who have not paid the required parking fee.  Having properly impounded the vehicle, UBC can charge a reasonable fee for towing and storage and hold the vehicle until payment. 

[54]            UBC’s common law proprietary rights do not give it the power to tow a vehicle, otherwise lawfully parked, because of a past offence.  Nor can UBC refuse to release a car that has been lawfully impounded until other outstanding fines are paid.

[55]            UBC cannot use its common law proprietary rights to collect the Parking Regulation Fines that it has no power to impose.  I note that in most cases the Parking Regulation Fines are well in excess of any notional damage caused to UBC.  To take but one example, a person who over parks at a meter faces a fine of $30 in circumstances where UBC’s actual loss of revenue may be less than a dollar.

[56]            In the result, therefore, the answer to common question 2(b) is a qualified no.  UBC cannot rely on its common law proprietary rights to collect and retain all the Parking Regulation Fines.  It can, however, rely on its common law proprietary rights to retain some towing fees and related storage fees.

[57]            The same answer applies to common question 3(b).  UBC’s reliance on its common law rights is not impacted by the finding that some portion of the Parking Regulations are ultra vires.

C.        Public Law Restitution

[58]            Question 4 raises the issue as to whether or not the plaintiff and other class members are entitled to public law restitution in the amount of the Parking Regulation Fines regardless of any juristic reason for the collection including Contracts and Licenses and UBC’s proprietary rights as the owner of the UBC campus.  As set out above, I have concluded that UBC does not have the right to contract for the Parking Regulation Fines.  Similarly, its common law proprietary rights do not extend to Parking Regulation Fines, albeit they are entitled to retain some towing and storage charges.

[59]            The plaintiff submits that the recent decision of the Supreme Court of Canada in Kingstreet Investments v. New Brunswick (Finance), 2007 SCC 1, [2007] 1 S.C.R. 3, has established that monies paid in response to ultra vires demands are recoverable as of right.

[60]             In his submission, the plaintiff cites at length from passages in Peter D. Maddaugh and John D. McCamus, The Law of Restitution, looseleaf Ed. (Aurora: Canada Law Book, 2008).  The authors suggest that in recent decades there has been a substantial reform of the restitutionary doctrines applicable to claims against public authorities.  In general terms, these reforms have substantially expanded the scope of the restitutionary liability of public authorities and dismantled the various doctrines that provided defences or immunities to such claims.

[61]            Maddaugh and McCamus state that the most important of the well-established proposition is that benefits conferred on a public authority that are caused by mistake, either of fact or law, are recoverable.  The plaintiff submits that this principle is applicable to the class members.  They paid under the mistaken belief that UBC had the authority to invoke the Parking Regulations.  The plaintiff submits that if UBC did not have that authority, restitution should follow as a matter of course.

[62]            The plaintiff further submits that payments made to a public authority under compulsion, including the traditional sense of duress to the persons or goods, are recoverable: Mason v. New South Wales (1959), 102 C.L.R. 108 (Aus. H.C.); Woolwich Building Society v. Inland Revenue Commissioners (No. 2), [1992] 3 All. E.R. 737 (H.L.).  In this case a class member who did not pay faced increasing fines or penalties, the seizure of vehicles and the withholding of university services.

[63]            UBC submits that Kingstreet does not support the broad recovery principle suggested by the plaintiff and is limited to circumstances in which a government has levied an unconstitutional tax.  It further submits that Kingstreet does not apply to legislation that is administratively ultra vires and should not apply in such circumstances.  It submits that private law restitution remains the applicable principle in the case at bar.

[64]            In the result, UBC submits that the plaintiff’s only possible claim is a conventional restitutionary claim that is subject to private law defences which form juristic reasons to deny recovery.  The juristic reasons UBC relies on in its statement of defence are the Parking Regulations, the Contracts and Licenses and its common law proprietary rights as owners of the campus.

[65]            In Kingstreet, the Court recognized three categories of restitution claims:  1) restitution for wrongdoing; 2) restitution for unjust enrichment; and 3) restitution as a constitutional remedy for unconstitutionally collected taxes.  While acknowledging that the retention of improperly collected taxes may unjustly enrich governments, the Court held that the ordinary principles of unjust enrichment should not be applied to claims for recovery of monies paid pursuant to a statute held to be unconstitutional: Kingstreet at para. 39.

[66]            In Kingstreet, the Court determined that taxpayers have recourse to a remedy as a matter of constitutional right because ultra vires taxes raise constitutional principles.  Because taxes can only be levied with the authority of Parliament, if the tax is ultra vires, then it is unconstitutional and there cannot be any juristic reason to deny recovery.

[67]            In Kingstreet, the Supreme Court of Canada was wrestling with the appropriate restitutionary remedy in the case of a constitutionally ultra vires tax.  Kingstreet is not an absolute statement about the effect of a constitutionally ultra vires finding outside of the taxation realm.  Nor is it an absolute statement about the validity of any private or public law defence and the issue of remedy.

[68]            In Kingstreet, the Court reasoned that the Crown should not be able to retain taxes that they were not entitled to collect.  At para. 53. the Court said:

This flows from the constitutional basis for the right of restitution in this case: that the Crown should not be able to retain taxes that lack legal authority. It therefore matters little whether the taxpayer paid under protest and compulsion. If the law proves to be invalid, then there should be no burden on the taxpayer to prove that they were paying under protest. Such a finding would be inconsistent with the nature of the cause of action in this case. As Lord Goff said in Woolwich, at p. 172, "full effect can only be given to that principle [that taxes should not be levied without proper authority] if the return of taxes exacted under an unlawful demand can be enforced as a matter of right". The right of the party to obtain restitution for taxes paid under ultra vires legislation does not depend on the behaviour of each party but on the objective consideration of whether the tax was exacted without proper legal authority.

[69]            While Kingstreet dealt with unconstitutional taxes, I do not accept UBC’s submission that its reasoning cannot be extended to a public authority such as a university which collects money without legal authority.  UBC purported to collect the Parking Regulation Fines pursuant to its powers under the U.A.  It now concedes that it has no such power.  Having collected the Parking Regulation Fines without any legal authority, those monies, like the taxes in Kingstreet, should be returned.

[70]            In Chiasson v. Canada (Attorney-General), 2008 FC 16, 295 D.L.R. (4th) 744 the court drew an analogy with Kingstreet in circumstances where the Minister of Fisheries had improperly taken money from an association of fishers.  Chiasson supports the conclusion that Kingstreet is not limited to unconstitutional taxes.

[71]            There is no question that there was, at the very least, in this case a mutual mistake about the validity of the Parking Regulations.  UBC, until the commencement of the trial, repeatedly asserted that the Parking Regulation Fines were imposed pursuant to the power granted to the Board under the U.A.  It has now conceded that it has no such power.  Throughout the class period, it told class members that it had such authority and on the basis of that power compelled the class members to pay the Parking Regulation Fines, threatening increasing fines and penalties, seizure of vehicles and the withholding of services if they did not do so.

[72]            As previously noted, in most cases the Parking Regulation Fines are far in excess of any damage caused to UBC by the miscreant parker.  That said, I accept that UBC at all times has retained its common law rights to remove a vehicle improperly parked and is entitled to recover the costs incurred.  

[73]            Considering the merits of this matter, it is noteworthy that almost half of UBC’s tickets go unpaid.  The person who has been penalized by UBC’s regime is the good citizen whose natural instinct is to trust that UBC has the power to impose the Parking Regulation Fines and pays the fine when it is demanded.  There is something fundamentally unfair that those good citizens should not recover the money that UBC had no right to collect in the first instance. 

[74]            This result is consistent with the decision in Keough v. Memorial University of Newfoundland (1980), 26 Nfld. & P.E.I.R 386 (Nfld. S.C.T.D.), a case also involving a university parking scheme.  In Keough, the court found that the university parking regulations were ultra vires and ordered the fines paid by the plaintiffs refunded.

[75]            This action was commenced in 2005.  Rather than seek an amendment to its governing legislation, UBC, until the eve of trial, maintained that the Parking Regulations were valid and enforceable.  Having now conceded otherwise, UBC can have little complaint that the money that it improperly collected is paid back to the class members.

[76]            As a result, therefore, I find that class members are entitled to restitution in the amount of the Parking Regulation Fines subject only to applicable defences under the Limitation Act, R.S.B.C. 1996, c. 266, monies paid to it for towing and storage charges of improperly parked vehicles and possibly UBC’s claim for set –off as set out in paragraph 46 of its statement of defence.  It may well be that given the findings made to date that UBC’s set-off claims may now give rise to further common questions.

Limitation Periods

[77]            If successful, many of the class claims will be subject to limitation periods.  The claim for remedial constructive trust has a 10-year limitation period:  Sun Rype Products Ltd. v. Archer Daniels Midland Company, 2008 BCCA. 278, 81 B.C.L.R. (4th) 199.  The other claims have a 6-year limitation period.

[78]            I note that the availability of a remedial constructive trust depends on the court exercising its discretion to award that remedy, rather than an award in the nature of damages.  Whether such a remedy is appropriate in this case has not yet been determined. 

Pre-Judgment Interest

[79]            The parties are agreed that if the plaintiff is successful at trial, then the class is entitled to pre-judgment interest under the Court Order Interest Act, R.S.B.C. 1996, c. 79.

SUMMARY

[80]            The Parking Regulation Fines are ultra vires.  UBC cannot enter contracts or licenses that incorporate the Parking Regulation Fines.  UBC’s common law proprietary rights authorize the towing and storage of vehicles parked contrary to the Parking Regulations.  UBC is entitled to collect the costs arising from such towing.  UBC cannot, however, rely on its proprietary rights to charge or collect the Parking Regulation Fines.  The plaintiff and other class members are entitled to restitution in the amount of the Parking Regulation Fines subject only to applicable defences under the Limitations Act, towing and storage charges and the applicability of UBC’s claim of set-off which has yet to be resolved.

[81]            Once counsel has had the opportunity to consider these reasons, they should arrange a pre-trial conference to determine the next steps in this class proceeding.

“The Honourable Mr. Justice Richard B.T. Goepel”

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The Honourable Mr. Justice Richard B.T. Goepel